U.S. INDUSTRIAL PRODUCTION UP 0.9%
U.S. FRB - Industrial production rose 0.9 percent in December even though manufacturing output only edged up 0.1 percent. Revisions to mining and utilities altered the pattern of growth for October and November, but the level of the overall index in November was little changed. For the fourth quarter as a whole, total industrial production jumped 8.2 percent at an annual rate after being held down in the third quarter by Hurricanes Harvey and Irma. At 107.5 percent of its 2012 average, the index has increased 3.6 percent since December 2016 for its largest calendar-year gain since 2010.
The gain in manufacturing output in December was its fourth consecutive monthly increase. The output of utilities advanced 5.6 percent for the month, while the index for mining moved up 1.6 percent. Capacity utilization for the industrial sector was 77.9 percent, a rate that is 2.0 percentage points below its long-run (1972–2016) average.
The output of consumer goods rose 1.0 percent in December, primarily as a result of advances in durables and consumer energy products. Business equipment registered a gain of 0.2 percent, led by an increase of 1.1 percent for transit equipment. The index for defense and space equipment climbed 0.7 percent. The output of construction supplies was unchanged, and the index for business supplies rose 0.5 percent. The production of materials moved up 1.1 percent on the strength of a 2.7 percent gain for energy materials; the indexes for durable and nondurable materials were unchanged.
In December, manufacturing output edged up 0.1 percent and was 2.4 percent above its year-earlier level. In the fourth quarter, the index for manufacturing moved up at an annual rate of 7.0 percent. The gain in manufacturing in December reflected increases of 0.3 percent and 0.2 percent in the indexes for durables and for other manufacturing (publishing and logging), respectively; the index for nondurables edged down 0.1 percent. Within durables, gains were widespread, with the largest advance, 2.0 percent, registered by motor vehicles and parts. Among nondurables, increases for most major industries were offset by declines in petroleum and coal products, in chemicals, and in plastics and rubber products.
The output of mines rose 1.6 percent in December primarily because of a gain posted by oil and gas extraction; the index was up 11.5 percent from its year-earlier level. In the fourth quarter, mining output advanced at an annual rate of 12.7 percent after being held down by the hurricanes in the third quarter.
Capacity utilization in manufacturing was unchanged at 76.4 percent in December and remained 2.0 percentage points below its long-run average. Utilization for durables edged up 0.1 percentage point to 76.1 percent, and the operating rate for nondurables edged down 0.1 percentage point to 77.9 percent. The operating rate for mines rose 1.2 percentage points to 85.6 percent, and the rate for utilities jumped 4.2 percentage points to 80.4 percent.
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